Institutional EYE

Commentary on Corporate Governance Issues

SEBI Corporate Governance Committee: Taking the next step

October 5, 2017

The SEBI Committee on Corporate Governance, chaired by Uday Kotak, submitted its final report today. The recommendations are aimed at achieving the dual objective of shareholder protection and long-term value creation.

The proposals cover a diverse set of items. They push corporates towards improving board effectiveness, enhancing oversight over group entities, tightening control over related party transactions, providing timely disclosures, increasing focus on audit quality, and facilitating investor participation. The proposed recommendations are grounded in market realities, and benchmark governance practices with local and global practices.

The report builds on the existing legal framework laid down by Companies Act 2013 and SEBI LODR - this approach puts the recommendations within reach of corporates. Further, the transition window (from between 2018 and 2020) gives boards the time to adjust and allows for a phased implementation of the recommendations.